How does Medicaid look back repayment work?

Does the medicaid look back period go 5 years to the day, or is it minth by minth? Ie if puttng $ into a trust, should it be by the first of the minth?

get in contact with a GOOD Elder Attorney......its worth the money to have someone super knowledgeable in these areas. and get one that only deals with elder issues.

Ok, here is what happened with us. My wife was stricken on March 23, 2005 and has been profoundly handicapped ever since. She entered the hospital that day and after 10 or more days, she was transferred directly to the nursing home the same day, and remained there for 100 days, all paid for by Medicare. Thus she satisfied the "30 day" continuous confinement to be eligible to apply for Medicaid. However, we had way too much money to even think about it, so I did not even look into it, much less think about it. (We were both 68 years old at the time.) Upon being discharged I brought her home and cared for her for two years and had a heart episode and had bypass heart surgery.
She went back to the nursing home on private pay. I had intended to once again care for her at home after my rehab but in three months time I was unable to do so, per doctor's orders and my own body's "complaints." Thus she remained there on private pay. Eventually a wise friend observed that she was likely going to be "healthy" though massively impaired for a very long time, so why didn't I hire ladies to sit with her as companions, then later why not put her into a private room, seeing as how I was going to spend "all" of our money eventually. So I did that. We spent well over half of our stash and I then began to think that we'd go broke eventually, especially because we had pretty much exhausted our after tax money, and what remained was IRAs and 401Ks and EE Bonds.

I visited the local Social Services (Medicaid) people after a couple of years of private pay and explained our situation. They said I needed a financial "snapshot" of assets as of the end of the month before the commencement of her 30 consecutive days of confinement, and that translated to Feb 28, 2005. Alas, we had moved to a smaller place and in that process I had ditched the records. Compounding the problem was the fact that I had probably 20 accounts with banks, a brokerage, my 401K, and on and on. I set about to collect those records. A couple of them took "forever" to collect. One institution did reply after two or three months but the data they send was not as of the correct date. So I had to wait another couple of months. Finally I got the data all together...Meanwhile I fortunately engaged a skilled elder care lawyer (on board of governors of the NC Bar Association, and chairman of the Elder Care committee.) He knew his stuff and then some. He and his staff guided me through the maze of paperwork to apply for Medicaid. They even dealt directly with the Social Services (Medicaid) people on our behalf. it took months to get that done because I was delayed so much by the aforementioned missing paperwork. Eventually it was approved, on the second application, but paid retroactively to the date of the first application. I forget the reason that the first one did not get approved on its own legs.

At the start of this process, as said, our assets were pretty much in IRAs and 401Ks, and also a very substantial amount of EE bonds. So, I figured, why not end up with all after-tax money, seeing as how we would be spending down anyway? Reason was why keep the IRAs as my allowed stash when it would mean every dollar taken out in the future would be taxable. So I did. I cashed in all of the IRAs, 401Ks, and EE bonds, and paid the enormous-to-my-thinking income taxes. I think it was well over $100K in taxes. But no matter as we had to spend down anyway and in selling all of them, I had the remainder all in after tax money.

The lawyer also helped us legally and ethically to buy a Single Pay Immediate Annuity for me, and a Medicaid compliant annuity for me. Thus I was able to keep another $60K in addition to my "community spouse" (healthy spouse) allotment which at the time was $109K.

The foregoing commentary is merely a high level glimpse of what we did. Every situation has differences. That is why I caution people to get all the facts they need from competent sources and not rely on hearsay.

I consider the Medicaid program to be very, very generous as it relates to our family situation.... I have no regrets about no longer having a large stash..Rather, I feel blessed to have enough to live on with enough left over at the end of most months to enjoy my hobby of motorcycling when the weather is good. I spend all of one of my pensions to pay for ladies to sit with my wife at the dinner hour (2 hours) seven days a week, and I visit her every morning and for lunch every day.

Please forgive omission or error in my comments.

Grace + Peace,

Bob

My Mom didn't apply for Medicaid until after she entered the NH. It was a struggle trying to find a Medicaid bed for her at a NH, and one that would be willing to wait for their money until Medicaid was approved. I was the lucky sibling who got to fill out all the paperwork and gather five years' worth of financial info. However, the whole process went very smoothly and her Medicaid was approved several weeks later. It normally costs $8,000/month for a 2-bed room. My Mom was required to cash out her $15,000 life insurance policy, which she had planned to use for funeral expenses.

Bob: I've agreed with you from square one.I already know she is going to have to front that money she gave grandkid B4 hopefully being able to get into the NH.

Need Clarification re OldBob: I thought one could not apply for snf Medicaid until institutionalized for at least 30 consecutive days?

Here's some reality: example husband and wife. countable assets $300k in cash, plus car and house. Wife needs nursing home care. She enters private pay nursing home care and soon enough is down to $240k in cash. Husband;s brother in law says he gets to keep about $120K as the community (still-in-the community spouse.) if wife goes on Medicaid So they spend down to about $130K and go to Medicaid and ask about applying, saying they have spent down close to the amount the Hubs would be allowed to keep....Whoops, Medicaid says you get HALF of what you have, but you only have $130K so you only would get to keep $65K and you will have to spend down to that amount....Beware of generalizations from well-meaning folks who have not been there or who are not qualified as a legitimate lawyer would be. Even some lawyers don't understand it..We dusted off three of them before we found the right guy.

Don't rely on your brother-in-law, barber, bartender, etc. Do not spendown without truly knowing what is involved.

Grace + Peace,

Bob

Re applying before spendown: I was also advised to not apply until after you had spent down or met the 5 year look back period. Something about the date you apply, and looking back from that date. So if you're one month shy of 5 years, wait, then apply for Medicaid. If state specific, this is NY

Llamalover there is nothing that can be done about the gift of the down payment for the house as I see it. She has to wait or pay privately until the amount of the gift is paid in either private pay or in equivalent waiting.

Grace + Peace,
Bob

I would look at her list of countable assets that she submitted with her Medicaid application. If it is on there, then they know about it. What affects it in terms of who is the beneficiary, I don't know. I tended to deal with the Medicaid people in hypothetical terms when wanting to know how such things work.

I don;t think the nursing home can claim anything once mom dies. They get their entire compensation from Medicaid plus anything that mom is required to pay, such as 100% of her Social Security when in the nursing home on Medicaid.

Personally, I found the Medicaid employees to be helpful and honest.

Grace + Peace,

Bob

Christine: I don't have the answer to that. Contact an estate attorney. My brother is one in the Sacramento area if you are near there.

Igloo: Your calculation (rounded up) is correct. The exact figure for $151 times 161 days is $24, 955.00 fronted money to be paid out of Gram's pocket, which is doubtful that she has.

Bob: Foot in the door, yea, I understand that but what happens when Grams can't front the money for the incorrectly gifted house?

The law having to do with Medicaid is that the home would have to be gifted 5 years in advance of the person applying for Medicaid. You've really got to be looking at all the Medicaid rules, such as the 5 year lookback, etc.

this may be a little off topic, but the people on this thread seem knowledgeable and a good group to ask. My mother is on a nh, on Medicaid. She has a modest life insurance policy. Can either Medicaid or the nursing home "take" it after her death? The nh called me shortly after she was admitted and asked who she had herlife insurance through. I won't call them to clarify because I don't trust them. Any help or answers will be appreciated.

Check on the SPIA (Single Pay Immediate Annuity). We increased our healthy spouse stash by an additional $60 by my buying one. (This is atty level stuff).

To Stefani: Bless you. I offer my sympathy. I have a hunch you will be able to get on Medicaid when/if the time comes for you to be in need of nursing home care. (I do not know if Medicaid applies to assisted living in any state. I mention that in case you would want to move into assisted living but not yet need nursing home care.)

My observation is that one cannot assume that Grams is impoverished if she gifted her grandson money. She may well be, but we don't know that.

Private pay is unbelievably expensive. I knew my wife was going to have to stay in for life and chose to get her a private room and it was $6500 a month in 2008 in NC. Now private pay for two to a room is $9500 a month at the same facility. It does not take long for most of us to spend down. She has been on Medicaid since June 2009. I consider Medicaid to be a very generous program.

Grace + Peace,

Bob

OldBob - my thought was based on the OP....If Genelegal1 mom gifts $$$ to grandson so is probably now impoverished, then grannie has no $ to private pay. There is no spend down as there is no $. Genelegal1 will have to private pay for her mom to stay in the NH to begin with. Painfully expensive.

When hubs applied for Nh for his mom, she had slightly over 2k in the bank. The medicaid caseworker for the NH, refused to take the application as it would be denied. Instead she was to spend down ASAP to get her next bank statement to under 2K & then turn in application with a new date & could be approved & retrod to day 1 of NH admission. NH ok with this too. What he was told was that a denial triggers all sorts of other compliance to be done & a denial with subsequent spend down & it's reporting was to be avoided if at all possible. individual Medicaid financial, although with reams of paperwork is pretty straightforward....you have to be impoverished, within 2K non-exempt assets& within whatever allowed for income.

Couples Medicaid is awhile otherbstory & imho really calls out for experienced legal & planning from a NAELA level atty as it can be quite complex to maximize the community spouses options. Yeah there are some things they can do on their own - (like changing life insurance beneficiaries from each other to kids or grandkids) - but doing creative, like medicaid compliant SPIAs (& this coming from someone who usually hates, hates, hates annuities but SPIAs can be ideal quick fix for a healthy younger CS with exce$$) really need knowledgeable professional expertise to do. NAELA is the platinum standard & they will have FA that understand nuances of medicaid compliance. Not a DIY project.

regarding nh pmnt of 4000.00 after my spouse death last month..i rent an apt and lease a car..i have just ss and no cd's no property..no assets..a term life ins policy for 15,ooo ..thats it.. will thee nh take that for pmnt? sspouse had term life for 5000?

Not to argue, but it won't hurt, and will likely help to apply for Medicaid before entering nursing home and then even if denied for a period of time, her foot is in the door and can then spend down as may be required with Medicaid being aware with what she is doing.

Parallel topic although off topic from the thread: many folk believe that if a married couple has one healthy person, say dad, and one that needs nursing care, which would be mom in my example, that if you "divide the money" and spend mom's half on her care that then she will be ok'd for medicaid and dad gets to keep his "half." Not True..Let me make that NOT TRUE. There is a half a loaf possibility but you will require an elder care atty to handle it as it is complicated. Presently the healthy spouse gets to keep UP TO about $120K in countable assets plus the house and a vehicle, and the spouse who applies for Medicaid must have no more than $2000 in countable assets. That is a very broad oversimplification, but it is the gist of it.
The key is don't spend down before applying for Medicaid. There is much, much more to it, but just saying again: costs nothing to apply for Medicaid and then in any situation, at least your foot is in the door.

Grace + Peace,
Bob

Indeed Medicaid views the gift as one that must be reported if Grandma applies for Medicaid within 5 years of that gift. If so, there will be a penalty period equal to the amount of the gift divided by the state "penalty divisor," which varies from state to state, but is roughly equal to the average cost of a shared room in your state's nursing homes.
So as you can see, only the "lookback period" of 5 years applies to gifts, not "estate recovery,'' which is when the state wants to be repaid after a Medicaid recipient's death.

You don't have to wait for grannie to die to deal with Medicaid. Grannie is not going to be eligible for medicaid from the get go. The downpayment will be viewed as gifting and a transfer penalty issued against grannie which means NO Medicaid approval to begin with. Its the $ that is the penalty not whatever it paid for downstream. You may be getting transfer penalty confused with estate recovery (MERP) which is an after death process on elders assets.

. Grannie -since she gifted $ & is now impoverished - will meet the financial qualification for Medicaid (usually 2k in non exempt assets & 2k income) but will be ineligible for Medicaid to pay due to transfer penalty.

Penalty has an equation based on whatever your state pays facilities as the Medicaid day rate for room & board. As Medicaid is uniquely administered in each state, this amount varies by state. Like TX is roughly $ 155.00 a day, so Olde Bobs 25K = 161 days of ineligibility.

The ? then becomes do you clear the living room out or your sons old bedroom out to make it grannies room for the next 5 1/2 months???

Oh, I forgot...not only does grams have to self pay the nursing home for the amount she gave to the young'un for the house, but she must APPLY for Medicaid before the commencement of the self pay...
Grace + Peace,

Bob

OldBob nailed it.

They'll want the money now in "self pay", not at her death, at least in our state. Plus, there's could be a penalty - in our state, that effectively doubles the amount of the gift in what your grandmother would have to "self pay."

Check with an elder law attorney in your area to see if there is a way out of this for your grandmother. The grandkid may have to buy the house immediately at fair market value, but that's just speculation. Check with a lawyer.

Unofficially, the ownership of the house has nothing to do with it. What counts is that Grams gifted him the down payment within five years of her applying for Medicaid. If the gift was, say, $25,000, then she (or someone) has to pony up that much money in "self pay" care at the nursing home before she gets any bennies. Prior to about November 2007 gifts would "amortize" at the rate of nursing home care a month at a time prior to grams going on Medicaid but that is a long-gone procedure. States vary on details, but this is the main thrust of it.

Grace + Peace,

Bob